In a development that has huge implication for the status of creative agencies, producing advertising content is starting to move away from them and toward media agencies and media companies. At a panel discussion Wednesday afternoon, executives said that the days of creative being the sole province of creative agencies are gone. They agreed that media agencies are often the place where a lot of the big ideas happen and are increasingly being carried out. David Verklin, president of Carat North America in New York, said that he thinks that media will be getting more creative work in the future. Verklin said creative is being unbundled right now, with a niche that will be filled in the future by creative boutiques and the fact that media companies like Hearst and Conde Nast developing hundreds of ads and the fact that NBC will provide creative as well. Verklin, whose Carat is a pure-play media agency in traditional media, said that was fine with him. "You know what's going to happen, we'll create it [content] ourselves if we can't get it from a traditional agency," Verklin said. Paul Woolmington, president of The Media Kitchen, echoed Verklin's sentiments. "The missing link is between what media agencies have traditionally done and what creative agencies have traditionally done, and in this new world that we're in, there's a big gray chasm in between and it hasn't been filled," Woolmington said. "I completely agree media agencies can become producers." The media-agencies-as-producers have already become reality, not only in the online space where the lines are blurred but also in the traditional world. Starcom worked with Miller Lite to create an eight-page insert that fit an appropriate environment but didn't work through a creative agency, said Starcom senior vice president Esther Franklin. Steve Farella, president and chief executive officer of TargetCast TCM, said clients love when his smaller agency brings an idea about producing a magazine, or a dozen vignetees, or doing things that wouldn't get on the radar screen of bigger agencies. "They love it. They absolutely love it," Farella said. "We are going to have the wherewithal to produce the creative," Farella said of media agencies. He said that bigger agencies might bring the capability in house, but smaller ones might use one team at an agency and another team at another, "the way creative guys used media departments or media help when they started their agencies. It's reversed. Media is the central core of the client. Creative ideas feed the vignette idea, or the magazine idea, or a campaign I think are going to start to come through." The agency people spoke during a panel discussion at the first day of Forecast 2004, a two-day conference sponsored by MediaPost Communications, publishers of the MediaDailyNews and MEDIA magazines. Wednesday's session, held in mid-town Manhattan, focused on traditional media with leaders in media agencies and companies, including MediaCom, Mediaedge:cia and PhD, plus ABC, CourtTV, Clear Channel and the Association of National Advertisers. The media forum was led by Joe Mandese, editor-in-chief of MediaPost. The conference continues today with sessions focusing on the online advertising industry.
A federal judge disconnected the National Do Not Call Registry, telling the Federal Trade Commission had gone beyond its authority. The ruling throws into doubt the adoption of the do-not-call list, which was scheduled to go into effect Oct. 1. U.S. District Judge Lee R. West decided that the FTC, which had been directed by Congress in 1994 to stop abusive telemarketing, had legal authority when it decided to implement the do-not-call list. "The court finds that it did not," West wrote. The ruling was hailed by the Direct Marketing Association, which noted that it still respected the wishes of the millions of consumers who have said loud and clear that they don't want to be bothered by telemarketers. The ruling was rued by the FTC, which has said it will appeal. In a statement Wednesday, the FTC noted that Congress passed the Do Not Call Implementation Act in February that authorized the FCC to collect fees from telemarketers to implement the do-not-call list. President Bush signed the bill in March. FTC Chairman Timothy Muris denied the FTC had overstepped its authority. "This decision is clearly incorrect," Muris said. "We will seek every recourse to give American consumers a choice to stop unwanted telemarketing calls." The FTC filed for a stay pending appeal of the decision. Meanwhile, the DMA said it and others were happy the court ruled in favor of them. But they said they didn't necessarily know what the judge's ruling meant, saying it would work with its lawyers, the FTC and others over its implications. "The DMA, however, acknowledges the wishes of millions of U.S. consumers who have expressed their preference not to receive telephone-marketing solicitations," the DMA said in a prepared statement. But it said that since 1985, the DMA's national no-call system called the Telephone Preference Service had been an option.
Viacom has trimmed its revenue expectations for 2003, with the media giant citing lower-than-expected local advertising. While the New York-based conglomerate owns a number of national companies - including CBS and the cable channels of the MTV Networks - it also holds a substantial local portion through its CBS owned and operated television stations and the 185 stations owned by Infinity Broadcasting. For many quarters, Viacom has trumped its ability to capitalize on the national advertising market. Advertising grew 11% in the second quarter, including a 31% increase in cable, 9% in television and 9% for Viacom's outdoor business. Advertising sales rose 8% overall in the first six months of 2003, with a 25% jump in cable, 7% in television and 9% in outdoor. In August, Viacom said its owned-and-operated stations group saw advertising revenues increase 11% in the second quarter. Yet radio's revenues dropped 3% in the second quarter and 2% in the first six months of the year. It said the lower radio revenues were primarily due to low single-digit increases in spot rates. On Wednesday, Viacom said its "robust" national advertising sales growth hadn't trickled down locally. "The pace of recovery in local advertising markets going into the fourth quarter is not as rapid as had been anticipated," Viacom said in a statement. Revenues will still rise, with Viacom predicting they will be in the mid- to high-single-digit growth instead of the high single-digit-growth predicted earlier. Viacom took a hit on Wall Street during Wednesday trading, dropping 3.58% to close at $38.83, a six-month low. But the news wasn't all bad. Viacom said that it still expected record growth in revenues, operating income, net earnings and earnings per share. And 2004 was looking god, too. "The company is extremely well positioned to reap the benefits of an expected improvement in local advertising markets in 2004, driven by an improving economy, political advertising, and the Super Bowl on CBS," Viacom said.